If it is to save more interest, then it is more cost-effective to choose average capital.
Because the average capital allocates the principal to each month, and then calculates the interest according to the principal, the interest decreases month by month.
In other words, the interest on average capital is lower than the equivalent principal and interest.
If borrowers choose average capital, they can save more interest.
It is more suitable for borrowers with strong economic foundation, high income and ability to bear greater repayment pressure.
If the borrower wants his monthly payment pressure not to be too great, it will be better to choose equal principal and interest.
Because the monthly payment of equal principal and interest is the same, the main repayment in the early stage is loan interest.
In this case, the borrower's loan interest is more, but the repayment pressure will be less.
Strictly speaking, matching principal and interest is more suitable for borrowers with stable income but insufficient funds on hand.
For example, some young people who have just had a stable job, or civil servants.
Generally speaking, there is no difference between average capital and equal principal and interest.
Borrowers only need to choose the appropriate repayment method according to their actual situation, and then repay on schedule to avoid overdue.
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Extended data:
Do you choose average capital or equal principal and interest for loans?
Choosing the average capital repayment method or the equal principal and interest repayment method mainly depends on your own repayment ideas and repayment ability.
For example, in the average capital, the total amount of loans is divided equally, and then the same amount of principal and interest generated by the remaining unpaid loans in the month are repaid every month; Matching principal and interest means repaying the same amount of loans (including principal and interest) every month during the whole repayment period.
Therefore, the average capital will bear a heavier burden in the early stage of repayment, which is more suitable for those who have a certain economic foundation and can bear greater repayment pressure in the early stage; Matching principal and interest, because the repayment amount is the same every month, is convenient to arrange income and expenditure, so it is not allowed to invest too much in early repayment for economic conditions, and it is more friendly to have stable income.
It should also be noted that it is precisely because of the great pressure of prepayment in average capital that the requirements for users' economic income are stricter.
Banks generally recommend matching principal and interest. After all, under the same conditions, the interest charged by principal and interest matching is more than the average capital, and banks can have more income.